Online Investors Consult Astrology 10/26/98
To Chart Their Financial Courses
By CASSELL BRYAN-LOW
THE WALL STREET JOURNAL INTERACTIVE EDITION
A small group of online investors are navigating their financial courses the
old-fashioned way -- by the stars. Financial astrologers are drawing a
following among free-thinking individuals who think their fortunes lie in the
heavens -- and converting a few skeptics along the way.
Web sites now provide investors with a rudimentary explanation of how
astrology relates to financial planning and investing, feature complex charts
and analyses of planetary activity, and offer advice -- for a price -- on how
it might impact trends on Wall Street.
Financial astrologers say the
positioning of the planets is the key to
predicting market activity. And the
surprisingly consistent performance of
a few well-respected analysts has
convinced some investors to give
astro-analysis the benefit of the doubt.
The most renowned financial astrologers is Arch Crawford, editor of the
market-timing newsletter Crawford Perspectives in New York. Mr.
Crawford's print newsletter issues "buy" and "sell" recommendations for
the market based on cosmic events such as lunar eclipses and planetary
alignments. His newsletter is not yet available online, but plans are
underway for a Web site by early next year.
"He's good," says Jim Schmidt, editor of Timer Digest in Greenwich,
Conn., a publication that tracks the performance of investment-advisory
newsletters. Crawford Perspectives had been ranked in the Top 10 of the
100 newsletters tracked by Timer Digest for the past eight years, and in
1995 was ranked No. 1 for the previous 12-month period. In the last year,
however, his performance has slipped to the middle of the pack, says Mr.
Schmidt.
Another financial astrologer is Henry Weingarten, manager of the
Astrologers Fund (www.afund.com). He claims success for forecasting
such events as the 1990 Tokyo market crash; the 1997 October
meltdown, and its subsequent rally; and this year's oil-price plunge.
"Astrology helps with market timing by mathematically charting investor
psychology," says Mr. Weingarten. "We have certain patterns in the sky
that repeat themselves on different occasions," he says, and these patterns
have so closely correlated with Wall Street's gyrations that it has convinced
him of the strength of astrology in forecasting markets.
To be sure, while the study of the stars claims an age-old history and
astro-analysts like Mr. Crawford are logging an impressive track record,
financial astrology continues to be shunned by most academics.
'Total Rubbish'
"Its total rubbish," says Patrick Thaddeus, professor of astronomy and
applied physics at the Center for Astrophysics at Harvard University.
"Anyone who bets his money following that kind of advice deserves to lose
it. You are better off following the entrails of animals after ritual sacrifice
[than the stars]."
Indeed, several financial analysts interviewed for this story said they did not
consider the use of astro-analysis to be sound financial advice, and
moreover most were reluctant even to be quoted in association with the
subject.
But the success of a number of Internet sites devoted to financial astrology
indicate individual investors are taking a more open-minded approach to
the subject.
Mr. Weingarten says his site, which attracts more than 50,000 hits a week,
charges subscribers fees that range from $300 a year for access to his
newsletter to as much as $3,500 for more detailed financial advice. While
he refuses to cite the exact number of paid subscribers, he says the amount
is constantly growing and members range from individual investors to large,
institutional investors.
The Astrologers Fund site offers a range of short-, intermediate- and
long-term investment analysis, and even makes projections into the next
millennium. Mr. Weingarten says a combination of astrology and technical
analysis steer his short-term strategy, while astrology and fundamental
analysis guide the longer-term. "We are primarily top-down investors," Mr.
Weingarten says, "we first look at the horoscope of a country, market and
sector, and then stocks."
Traditional market analysis tends to take a fundamental or technical
approach. Fundamental analysts evaluate a company's financial statements
-- balance sheets, earnings, assets -- in order to ascertain a stock's value.
Technicians, on the other hand, ignore the company altogether. They say
the best market strategy is based on the study of stock price movement,
volume, and trends, which when charted reveal patterns.
The 'Third Force'
"Astrology," Mr. Weingarten says, "is increasingly recognized as the 'third
force' in the marketplace." When used in conjunction with more traditional
forms of analysis, astro-analysis can serve as an important market
indicator, particularly with the aspect of timing of investments, he says.
For the novice, the Web site offers some useful background information.
There are articles on astrology, data sources and a fairly comprehensive
frequently asked questions, or FAQ, area. For those seeking more
in-depth and up-to-date market commentary, there are different levels of
subscription targeted at the long-term investor, the short-term trader or the
professional money manager.
As with other forms of market analysis, financial astrology covers a variety
of approaches. Rainsford Yang, founder of Astrikos Trading Services
(www.astrikos.com), says his Web site focuses on short-term, day-to-day
trading. His analysis rests on a combination of technical analysis and
astrology.
"I don't use fundamental analysis at all," he says, since he believes
fundamentals already have been factored into the market price. Instead, he
studies technical charts to pinpoint his investment approach, and then
incorporates astrology to determine the timing.
In addition to a vast array of charts for the technician, the Web site offers
astrological and technical commentary to help individual investors interpret
the various data. The astrological analysis primarily covers U.S. stocks and
futures, but includes some international markets, including a focus on Asia.
But what really sets the Web site apart from rival sites that it features a
planetary-based indicator called the Bradley Siderograph. Originally
developed by astrologer Donald Bradley in the 1940s, it is a means of
plotting the distances between the planets -- which, when weighted through
a number of scores, produces a series of troughs and peaks. The Astrikos
site describes how the data is plotted, and offers access to charts covering
the last 20 years. Mr. Yang says the cycles in the Bradley signal tend to
coincide with significant market turns.
Having studied Bradley data dating back more than 100 years, Mr. Yang
says that while it doesn't necessarily mirror movements on Wall Street, "it
tends to represent psychological shifts."
David Plonk, head of Plonk Investment Group of Myrtle Beach, S.C., and
is a regular visitor to the Astrikos site, says the Bradley is the site's most
interesting feature. He primarily focuses on technical analysis, he says, but
"the Bradley is a key confirming indicator."
For example, the Bradley predicted the 1987 market high "to the day,"
called the October 1997's collapse and then indicated a market reversal,
Mr. Plonk says. This year the Bradley was in an upturn all year and
reached a significant high July 20, and has been in somewhat of a free fall
ever since -- not much unlike Wall Street. Mr. Plonk believes there is
"something very real working here."
Richard Harmon, an amateur investor from Broomfield, Colo., says that
while the subject matter interests him, he's not ready to base his investment
decisions on cosmic events. Still, he visits the Astrikos site monthly to
compare the Bradley's predictions to the market's activity. He says that
while he doesn't really understand it, he admits there is "a spooky
accuracy." Mr. Harmon says he needs more time to track the performance
of the Bradley before making any changes in his portfolio.
Jerry Favors, editor of "The Jerry Favors Analysis" newsletter,
occasionally highlights the indicator's major turning points on his weekly
market-analysis segment on CNBC. Mr. Favors admits that his own
experience with the Bradley has not always been from the perspective of a
believer.
Highly Skeptical
With a background in technical analysis, he was highly skeptical of financial
astrology. But in 1991, he heard about the Bradley and its accuracy and he
started following its predictions, to the extent of developing a program to
chart the Bradley in the past and future. Going back over 60 years, he
says, it called the market highs and lows so accurately that he became a
convert.
Mr. Thaddeus, the Harvard professor, dismisses the Bradley's predictive
claims. "People are grasping for straws," he says. It's like the wallpaper
effect, he says: If you look at the wallpaper long enough you're bound to
think you see all kinds of patterns. While the market does move in cycles,
as do the planets, financial astrologers are looking for causality where there
is merely correlation, says Mr. Thaddeus.
Nevertheless, Robert Hitt, who has run AstroEcon (www.astroecon.com)
since 1995 but has spent over 20 years researching financial astrology,
believes there is a deeper causal link. The alignment of the planets affects
public sentiment, he says. "Astrology affects the mass mood, and the mass
mood affects the market."
While concentrating on analysis of the broader U.S. market, Mr. Hitt also
creates charts for individuals. These, he says, reveal timing cycles and
issues important to them. For a fee of $30 and up, individuals can receive
computer-generated charts, while more personalized guidance can run
upwards of $100 per hour. His client list includes mutual-fund managers
and floor traders, as well as amateurs, Mr. Hitt says. In some cases, he
says, he's even advised clients that investing was simply not in the stars for
them.
Mr. Hitt, along with Mr. Weingarten and Mr. Yang, advise that astrology
should always be used in conjunction with other research. It should seen as
a back-up, or confirmation of other research.
Astro-Analysis Is Fallible
And Mr. Weingarten of Astrologers Fund admits that astro-analysis is
fallible. "We do make errors," he says, "and we don't know everything
there is to know." In 1997, he said six months in advance that March 11
would see the market high for the year. While it proved to be a short-term
high, it was by no means the year's high. He predicted Oct. 10 of this year
would see a 1000-point drop; while the volatility was right, the market
actually surged more than 1000 points in the days after the Federal
Reserve unexpectedly cut interest rates.
So, what do the stars have in store for the markets in the coming week?
Astrologers warn the period of danger is not over. "October is loaded with
land mines," notes Mr. Weingarten, who says the period surrounding Oct.
24 is a particularly interesting time, due in part to an ominous alignment of
Saturn and Neptune. It was a similar aspect that ruled the real-estate crash
in 1989, he says, adding that there hasn't really been a similar alignment
since. He noted, however, that the signals this time around are not as
strong.
What does this mean for Wall Street? Probably another downward move
of a couple 100 points or so for the Dow industrials, says Mr. Weingarten.
Mr. Hitt agrees. The end of October is a period of intense negativity that
could see significant lows, he says. With the Sun moving into Scorpio Oct.
21, the positioning of the planets could have a damping effect on investor
sentiment. The scorpion influence tends to be desire-orientated -- greedy
and manipulative -- where one might be inclined to take profits. He warns:
"It is a very tricky time of year."
interactive.wsj.com |
